Viewpoint December 2006
Rolling into '07 with a wee bit of bravado
by Bob Gershberg
Managing Partner, Dick Wray Executive Search
As we come into the home stretch of 2006, we can reflect with a smile. The restaurant economy remained healthy for the most part and surely expanded, in spite of a few bumps along the way. Private equity has not only found us but appears to have become enamored of our oft-eschewed industry, paying multiples unheard of in the recent past. With substantive capital continuing to pursue companies in the hospitality arena, we expect this trend to continue well into 2007, with the welcome addition of a few strategic purchases as well.
Pomegranate martinis, an array of flavored mojitos, homemade bitters, in-house infusions, fresh-squeezed juices and flights of spirits will grace our cocktail choices. The threat of browns replacing clears still looms; however, do not expect the 84 pricey flavored vodka choices to disappear anytime soon.
Small plates will continue to be big, and not just at tapas bars. Japanese izakaya—traditional-style pubs serving small portions of fried tempura, simmered nimono or grilled yakitori with plenty of beer and sake to wash them down—will begin to give sushi bars pause. Mini-sliders, mini-sandwiches and shot glass flights of soup will appear on menus everywhere. Don't fret over declining check averages, as the plethora of better wines by the glass will handle this issue in accretive fashion.
Tableside is back, albeit not your father's tableside by any means. Bix in San Francisco has a seasonal heirloom tomato-tasting cart. Osteria via Stato in Chicago features a buffalo-milk mozzarella cart, while Sonoma's Cyrus wheels out an array of caviar and champagne choices to please any discriminating palate.
Trans fat is clearly out, and not just as a reaction to local and regional proposed legislation and lawsuits filed by the Center for Science in the Public Interest. Wendy's removed trans fat from its french fries earlier this year. Walt Disney said it will eliminate trans fat from food sold at its parks. And now KFC, the bad boy of trans fat-frying in the QSR industry, will switch by April and eliminate the artery-clogging trans fat in its fried chicken.
A counter-chic movement perhaps... well-known chefs continue to open incredible burger joints: the Burger Bar in Vegas, 25 Degrees in Hollywood and 28 Degrees in Boston. Bobby Flay and David Burke are planning theirs in NYC. Even Thomas Keller is rumored to be creating a Napa Valley burger concept as we speak.
Bolder flavors will continue to be the trend as America's tastes continue to become more sophisticated and diverse. The chef-owner model is here to stay. The breakfast segment will continue to be sought after, but the pizza players will likely not be winners here. With the aggressive expansion plans for Dunkin' and Starbucks, getting a good cup of joe on any street corner in any given town will become a reality. Hotels will remain hot as prime locations for great restaurants in major markets.
In Chicago, disgruntled waitstaff have begun to post the names of bad tippers on the Internet... oh, my!
And from our friends at Zagat, some '07 survey highlights:
• 83% are eating out as often as or more often than two years ago
• 67% are spending more per meal
• $39.43 average meal cost in NYC—leading the U.S.
• $73.69 average meal cost in Tokyo—leading the world
• 72% say poor service is the greatest irritant
• 5% cite disappointing food
• 27% favorite food—Italian
• 25% close second—Chinese, Japanese and Thai combined
• 63% would travel 45 minutes or more for a good meal
So as we approach '07 with the vigor so characteristic of our industry and its passionate players, we at Dick Wray Executive Search wish you all great success with a strong dose of personal and professional fulfillment.
May this holiday season bring you and your loved ones all of life's best!
All the best,
Bob